"I do not believe that a two-thirds majority of the NSW
Nationals could be found to support a merger with the Liberals," Ms
Ferguson said.

Today Dr Nelson backed away from his earlier strong stance,
describing a question about whether he would quit the leadership if
the merger did not go ahead as "nonsense".

"I'm here to talk about carers, pensioners, the elderly and the
frail and Australia's hospitals and health care agreements," he
told reporters in Sydney when pressed on the matter.

"I've already made remarks about a proposed merger between the
Liberal and National parties and I don't intend to add to
them."

In an earlier interview, Dr Nelson said the Nationals faced
significant challenges because the Liberal Party represented many
rural and regional parts of Australia - the Nationals' traditional
heartland.

"I think if we take the medium- to long-term view, there's a
very strong case for merging our two parties," he said.

Nationals leader Warren Truss said it was possible a new party
could be created within three years.

"In states like Queensland there is a lot of pressure to take
action promptly, in other words, within months," Mr Truss told ABC
radio.

But he said it would be wrong to pre-empt the review of the
Nationals being conducted by former party leader John Anderson.

Liberal frontbencher Joe Hockey said the Nationals had lost
their "unique association" with farming communities, bolstering the
case for a merger with the Liberals.

"I'm not saying they don't represent them [farmers] and
represent them very well, but I think they have lost the unique
association with the farming community," Mr Hockey said.

He said Australian voters wanted "a clearer, more identifiable"
political party to represent liberal conservative interests "and
not just a sectoral interest".

But Mr O'Farrell said the Federal Opposition could not blame its
election loss on the lack of a single conservative party.

"Our colleagues ought to be looking at the issues that caused
their loss, working their way through those, and demonstrating to
the electorate that they will get it right next time," Mr O'Farrell
told reporters in Sydney.

Prime Minister Kevin Rudd said the Nationals were a declining
force and neither party knew what it stood for anymore.

"The problem that these two parties present at the moment is
it's quite unclear to the Australian people what principles they
stand for," Mr Rudd told reporters in Canberra.

Some Nationals have voiced concerns about a merger, with Senator
Barnaby Joyce warning Dr Nelson's plan sounded like a Liberal
takeover.

"Most people would see a merger as really just a takeover of one
body by the other," Senator Joyce told ABC radio.

A merger would end the 64-year history of the Liberal Party
and
78 years of representation of rural voters by the Nationals.